ACME has been having inventory management problems with one of their major components. They have been relying on the experience of their purchasing commodity manager to manage the inventory. The Senior Vice President has decided to implement a simple Q, R system based on a Continuous Review Policy. The Average demand per week is 90 units with a standard deviation of 30 units, and it takes 16 weeks from order to replenishment from the supplier. The Senior Vice President wants a Service level of 98% for this component in other words, she is willing to accept stockouts for only 2% of the time.

The relevant z-table information is given below:

Service Level	90%	91%	92%	93%	94%	95%	96%	97%	98%	99%
z	1.29	1.34	1.41	1.48	1.56	1.65	1.75	1.88	2.05	2.33

What is the Re-Order Level (R)? - (if required, round it to the next highest round number)

Group of answer choices

A 1696 B 2154 C 1854 D 1046 E 1265

In the above situation, ACMEs Senior Vice President also wants to know what the new Safety Stock level would be if she decreased the Service Level to 96%. What would be the new Safety Stock in this case? (if appropriate, round it to the next highest round number

Group of answer choices

A 185 B 149 C 276 D 210 E 315

ACMEs Head of Sourcing has found alternative sources for the component and can reduce the costs considerably but will also increase the lead time to 25 weeks. This large increase, he believes, can be offset by good planning and improved ordering methods. His goal is to maintain a Service Level of 97% for the customers. What would be the new Safety Stock that ACME should maintain? (if appropriate, round it to the next highest round number)

Group of answer choices

A 346 B 185 C 282 D 210 E 315